Leslie Kasperowicz holds a BA in Social Sciences from the University of Winnipeg. She spent several years as a Farmers Insurance CSR, gaining a solid understanding of insurance products, including home, life, auto, and commercial, and working directly with insurance customers to understand their needs. She has since used that knowledge in her more than ten years as a writer, mainly in the insuranc...

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UPDATED: Oct 18, 2021

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Important facts to know...

  • If your car is a registered vehicle to be driven, then there is a requirement to maintain auto insurance for that vehicle
  • When another vehicle is towing a car, it is the vehicle towing the other car that extends liability coverage for any damage caused by the car that is being towed
  • To be covered for any damage, the car being towed will need to have its own insurance policy for the repairs
  • You should check out the car insurance policy on the lead car in a towing situation to find out the exact coverage limitations for insurance extending to a vehicle being towed
  • There may be specific requirements for coverage in regards to the type of trailer doing the tow, which could be found in your specific car insurance policy

When you are getting ready to tow a car on public roads, it is important to check out what the auto insurance coverage situation is for all of the vehicles involved in the towing operation before you start.

If the car being towed is also a registered vehicle in any state in the U.S., then there will be a requirement to maintain auto liability coverage on that vehicle in addition to any coverage that the vehicle doing the towing may have.

In the event of an accident, coverage will extend from the vehicle doing the towing for damage caused to another car or truck by the vehicle being towed.

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Car Insurance Requirements for Registered Vehicles

Having a car towed does not trigger a legal requirement for car insurance on its own. Rather, if you have a car registered in any state in the U.S., you must also have car insurance for that specific vehicle.

In many states, it is a prerequisite for having the vehicle registered.

If you go to buy, finance, or lease a car from a dealership, you will typically not be allowed to take the car off of the lot without following through on the legal requirement to obtain car insurance for that vehicle. The dealer may have other insurance requirements to fulfill too.

The basic state requirement for auto insurance coverage is for an auto liability policy.

The main purpose of this type of policy is to protect other cars and drivers on the road from damage that you could cause to them.

There will be a minimum amount of liability coverage that is required by each state. This is the first thing that you will want to make sure that you have covered when you are requesting car insurance quotes and going to sign for an auto insurance policy.

Your auto insurance agent will be able to tell you what the minimum coverage amount is in your specific state.

If you are in the market for auto insurance, then you need to assess whether you should have coverage above the state requirements.

The reason that you would want to increase your liability coverage is that you could be responsible for way more damage than what would be covered by state minimums.

Another thing you should check into is if there are other types of insurance coverage that make sense in your situation. For example, you may want to make sure that your own car is protected against any damage it could sustain.

This would be provided through a comprehensive or collision insurance policy, which are both optional in every state.

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How Auto Insurance Works in an Accident with a Towed Car

If there is an accident that is caused by a car that is towing another vehicle, the auto liability policy of the lead car will extend to cover the damage caused by the car in tow.

If the car being towed is damaged, then the damage could be covered under the collision policy maintained by the towed car.

This is why it is recommended that you have collision insurance in place on a car being towed so that you are able to recover for any damages sustained by that vehicle.

If another car is damaged by a towed car, the owner of the hit car would file a claim against the lead car in the towing operation. Keep in mind that damages can be very expensive in this situation because of all of the moving parts involved in a towing operation.

The lead driver should have high enough liability coverage limits before engaging in a towing operation on any roads because the damages from an accident could be difficult to pay out of pocket.

Wrap Up on Whether a Car Needs Auto Insurance Coverage if it is Being Towed

Car insurance is a legal necessity on any car in the U.S. that is registered through a state department of motor vehicles (DMV). If a car is being towed and is registered to an owner, then an insurance policy is required for that car.

Towing a car does not change the insurance requirements for a registered vehicle. If a vehicle is not yet registered, then there may not be any requirement to maintain coverage on it for the towing operation on its own.

The lead car in the towing operation should have sufficient coverage and high enough coverage limits to cover any damage to other cars in the road caused by an accident involving the towed car.

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